The Merger & Acquisition team hired a team of external consultants to assist with identification of cultural
issues which could result in barriers to the successful acquisition of Island Banking Services by Padgett-Beale.
The consultants conducted interviews with Padgett-Beale executives and senior staff. They also used a
standardized survey to measure attitudes and beliefs about culture and conflict management styles at PadgettBeale. A survey of islanders was conducted as well. The results from both surveys have not yet been validated but, the early results show substantial similarities to existing national culture survey results for U.S. populations
and residents of Fiji. You can learn more about the national culture surveys here:
https://www.hofstede-insights.com/models/national-culture/
https://www.hofstede-insights.com/country-comparison/fiji,the-usa/
An additional survey was conducted among Padgett-Beale managers who will transfer to PBI-FS and island residents who have applied for jobs at PBI-FS. This survey focused primarily on the influence of context upon inter-cultural communications. This survey found that Padgett-Beale's corporate communications culture was "low context" while the job applicants expected a "high context" culture. For definitions and examples see:
http://www.culture-at-work.com/highlow.html
After reviewing the consultants' reports, the M&A team has decided to focus on differences in two factors which could present immediate barriers to success: (a) communications context and (b) power-distance.
Cultural Dimension Padgett Beale Managers & Employees PBI-FS Job Applicants (Islanders)
Communications Context Low Context High Context
Power-Distance Medium Power Distance High Power Distance
To answer questions and allay concerns, you've been asked to prepare a briefing about these factors to be given at the next senior leadership meeting. For that briefing you must research and answer the following questions:
- What is "communications context" and how could it influence expectations of managers and employees and
their relationships with each other at PBI-FS?
- What is "power-distance" and how could it influence expectations of managers and employees and their
relationships with each other at PBI-FS?
- How might differences in communications context (low/high) and power-distance contribute to conflicts
within the new organization (PBI-FS), e.g. between transferred PBI personnel and newly hired islanders?
- What best practices should managers and executives follow when conflicts arise between the company
(Padgett-Beale) and its new subsidiary (PBI-FS)?
Briefing: Cultural Differences as Barriers to Success
Communications Context Communications context refers to the degree to which individuals rely on explicit and direct communication versus implicit and indirect communication. In a low-context communication culture like Padgett-Beale, information is conveyed explicitly, and messages are expected to be clear and concise. However, in a high-context communication culture like the islanders, messages are often conveyed indirectly, relying on non-verbal cues, gestures, and shared understanding.
The influence of communications context on expectations of managers and employees at PBI-FS can be significant. Managers from Padgett-Beale may expect direct and explicit communication, leading to potential misunderstandings with islander employees who rely on more implicit communication styles. This difference in communication context can create challenges in building relationships, exchanging information, and collaborating effectively.
Power-Distance Power-distance refers to the extent to which less powerful members of a society accept and expect unequal distribution of power. In a high power-distance culture, there is a greater acceptance of hierarchical structures and authority, with less emphasis on challenging or questioning authority figures. In contrast, a medium power-distance culture like Padgett-Beale promotes more egalitarian relationships and encourages employees to participate in decision-making processes.
Power-distance can influence expectations of managers and employees at PBI-FS. Padgett-Beale managers may be accustomed to an environment where employees feel comfortable challenging decisions or providing input. However, islander employees who are accustomed to a high power-distance culture may hesitate to question authority or express dissenting opinions. This difference in power-distance can lead to strained relationships, lack of employee engagement, and hindered innovation.
Contributions to Conflicts Differences in communications context (low/high) and power-distance can contribute to conflicts within the new organization (PBI-FS). Transferred Padgett-Beale personnel may perceive islander employees’ indirect communication style as vague or lacking clarity. Conversely, islander employees may view the direct communication style of transferred personnel as aggressive or disrespectful. These misunderstandings can lead to conflicts, frustration, and breakdowns in collaboration.
Additionally, the difference in power-distance may lead to conflicts when transferred Padgett-Beale managers expect open dialogue and participation from islander employees who are more deferential to authority figures. This mismatch in power dynamics can result in a lack of trust, decreased employee morale, and resistance to change.
Best Practices for Conflict Resolution When conflicts arise between Padgett-Beale and its new subsidiary, PBI-FS, managers and executives should consider the following best practices:
Develop cultural competence by providing training and education on cultural differences to increase awareness and understanding.
Foster open dialogue and encourage active listening among all employees to bridge the communication gap.
Create a safe space for employees to express their opinions and concerns without fear of retribution.
Establish clear guidelines for decision-making processes that consider input from all levels of the organization.
Encourage cross-cultural collaboration and team-building activities to build trust and enhance understanding.
Seek mediation or conflict resolution assistance from neutral third parties when conflicts become particularly challenging.
By addressing these cultural differences proactively and implementing effective conflict resolution strategies, Padgett-Beale can mitigate potential conflicts and foster a harmonious and productive work environment at PBI-FS.